Australia: RBA leaves rate unchanged
February 7, 2012
On 7 February, the Reserve Bank of Australia (RBA) left the cash rate unchanged at 4.25%. This was a surprise move, as market analysts had expected the RBA to cut rates for the third meeting in a row. According to the RBA, information on the Australian economy continues to suggest growth close to trend, although with differences among sectors of economic activity. With regard to inflation, the Bank expects it to be in line with the 2.0% - 3.0% target range over both this year and the next. Monetary authorities judged that the setting of monetary policy was appropriate for the moment. However, the inflation outlook would provide scope for easier monetary policy, if growth falters in the coming months. According to analysts, the phrasing suggests that the RBA remains open to further rate cuts going forward.
Author: Armando Ciccarelli, Head of Data Solutions